When should investors redirect funds from Ethereum Classic to another crypto

Ethereum Classic’s mar­ket has not sub­ject­ed itself to any sort of bull­ish­ness for quite some time now. Even though the ‘rise in price’ nar­ra­tive is gain­ing steam in the broad­er mar­ket, the alt has been con­tin­u­ing its down­ward tra­jec­to­ry on the price charts.

In the last 24 hours alone, for instance, the cryp­to shed more than a per­cent of its val­ue. It was seen exchang­ing hands around the $52-mark, at the time of writing.

Multiple downfalls

Well, ETC’s down­ward tra­jec­to­ry is def­i­nite­ly not some­thing new. The quick pace of devel­op­ment activ­i­ty, how­ev­er, is the aston­ish­ing and not-so-expect­ed twist to ETC’s oth­er­wise monot­o­nous tale.

It can be observed from the snap­shot attached below that this met­ric rapid­ly rose in Octo­ber and hit a year­ly high. Nonethe­less, it fell back as quick­ly as it rose in the same month and was seen quite close to its local bot­tom, at the time of writing.

Source: San­ti­ment

What’s more, amidst Grayscale’s ETF hype, the ETC Trust has been com­mand­ing the biggest dis­count to its net assets among all of the firm’s invest­ments. At press time, it was seen that ETC’s shares were trad­ing at less than half the price of ETC’s spot val­ue. As per data from Grayscale, the Ethereum Clas­sic Trust closed at an under­whelm­ing $19.3 on Friday.

At this point, if you divide the $652 mil­lion ETC that the trust owns by the near­ly 14 mil­lion shares out­stand­ing, you’ll get a val­ue of $46.64 per share. In oth­er words, investors are get­ting expo­sure to ETC for around $0.4 on the dollar.

Source: Grayscale

So, is this the right time to fill bags?

Sim­ply put, no.

One, buy­ing into the trust doesn’t mean that investors would be able to cash out at the going rate of the cryp­to. Even ama­teur investors who believe that they’re get­ting shares at a bar­gain of more than 50% have no assur­ance that the dis­count would get nar­row­er when they decide to sell.

So, at this point, any sane investor famil­iar with the whole ecosys­tem would instant­ly decline to enter the ETC mar­ket. But, for dilet­tantes, ETC is like the gold­en duck – giv­en its ear­li­er out-of-the-blue rallies.

In effect, mar­ket par­tic­i­pants who bought the token dur­ing May’s highs are still cling­ing to it, hop­ing his­to­ry will repeat itself.

Clouds of uncertainty

Keep­ing aside the share’s mar­ket price, there is a lot of unpre­dictabil­i­ty asso­ci­at­ed with the val­u­a­tion of Ethereum Clas­sic itself. Giv­en the crypto-asset’s cur­rent down­ward tra­jec­to­ry, even its 6 Sep­tem­ber local high of $77 seems quite far-fetched right now.

To make things even worse, the alt has been trad­ing below its mov­ing aver­age over the last cou­ple of days – Not a healthy sign. In essence, it doesn’t look like ETC would be able to inch clos­er to its $180 ATH any­time soon.

ETC/USDT || Source: TradingView

Lost cause

Even the on-chain met­rics of the coin did not sup­port the change in trend nar­ra­tive, at press time.

Con­sid­er the NVT itself, for instance. This met­ric has been tread­ing more towards the low­er side of late, imply­ing that Ethereum Classic’s net­work val­ue hasn’t been able to keep up with increased usage of the net­work. This poten­tial­ly rep­re­sents bear­ish sentiment.

Now, at one point, alts like XRP seemed to be in quite sim­i­lar posi­tions, one where achiev­ing pre­vi­ous ATHs seemed to be close to impos­si­ble. Attain­ing that feat now, how­ev­er, seems to be quite a pos­si­bil­i­ty for such alts.

Nev­er­the­less, XRP and oth­er alts’ suc­cess doesn’t nec­es­sar­i­ly mean that ETC would be able to pull off some­thing sim­i­lar. ETC is cut from a dif­fer­ent cloth alto­geth­er. In light of the state of its cur­rent price direc­tion and met­rics, it is quite unlike­ly the cryp­to will recov­er and pump any­time soon.

So, investors can con­sid­er re-direct­ing their funds to bet­ter-per­form­ing assets, instead of just wait­ing for this cryp­to to rally.